Timing usually isn’t the issue in workers’ compensation cases. Most insurance companies almost immediately make settlement offers. However, in most cases, these proposals are low-ball offers. That’s why it’s usually a good idea to reject the first offer.
Unfortunately, Bart’s assessment that the longer he waits, the more he’ll pay isn’t always accurate, at least in the job injury context. Workers’ compensation settlement offers don’t automatically get bigger. If anything, they often get smaller.
Eventually, workers’ comp offers a fair settlement, but as outlined below, “eventually” could be a very long time. Formal, court-supervised mediation is very rare in these cases. So, a fair workers’ compensation settlement is almost a function of a job injury lawyer’s negotiation skills.
Job Injury Benefits
First, let’s take a step back and discuss the financial benefits available in a job injury matter. Additionally, it’s important to understand the insurance company’s mindset. These companies make money when they collect premiums and lose money when they pay claims. It really is that simple.
In most states, workers’ compensation insurance premiums have declined in recent years. Declining revenue means these companies often look for ways to deny claims.
Job injury victims are usually entitled to lost wage replacement and medical bill payment. Grounds for denial are plentiful in both areas.
A worker’s Average Weekly Wage usually determines the amount of lost wage replacement. In high school, prior grades determine a student’s GPA. But in the job injury context, prior and future wages comprise the AWW. Many insurance companies intentionally don’t include items like future lost overtime opportunities and performance bonus benchmarks in their AWW calculations.
Workers’ compensation also pays all reasonably necessary medical expenses. To a victim, reasonably necessary means doctor recommended. To an insurance adjuster, reasonably necessary usually means cheapest available.
The Workers’ Comp Settlement Process
At first, insurance companies have the edge in job injury settlement negotiations, especially if the victim doesn’t have a lawyer. If a victim doesn’t take the first offer, medical bills immediately pile up. Additionally, as mentioned, there’s no guarantee the next offer will be higher.
Lawyers address these concerns. In most states, job injury victims can choose their own doctors, and attorneys can work out payment deferral arrangements. So, in many cases, represented victims don’t pay medical bills until they get their settlement checks. Furthermore, studies consistently show that attorney-negotiated settlements are much, much higher than other settlements.
Many workers’ comp claims settle prior to an Administrative Law Judge appeal hearing. Statistically, victims with lawyers win most of these hearings, so the insurance company is at a disadvantage. A slight edge is all a good lawyer needs to obtain a good settlement.
